Hi,
Just wondering if I could get some more information on partial mortgages? Are they popular in Australia? Who offers them? Would you recommend one, or against one?
To me, they seem like a good idea.. as you get to pay less for a nicer place.. but your capital gains are slightly stunted depending on the share ownership.
Any thoughts?
what you are referring to is a shared equity mortgage
see these links for more info
http://www.smh.com.au/news/national/equity-tradeoff-for-bigger-home-loans/2007/03/13/1173722471210.html
http://www.domain.com.au/Public/Article.aspx?id=1174761708686&index=NationalIndex&headline=Warning%20on%20shared%20equity
http://www.news.com.au/heraldsun/story/0,21985,21640642-664,00.html
http://www.investordaily.com/cps/rde/xchg/id/style/1435.htm?rdeCOQ=SID-3F579BCE-AD9B74F5
http://www.mobiusfinancial.com.au/PDF/200409_Aust-1st-shared-equity-product.pdfFrom what I know about this it was only available to first home buyers and had location restrictions as well.
It may not be a big money maker but it allows a home buyer to enter the property market who may otherwise have been priced out of the market. Then later on when you sell you reimburse the lender ( read links above) but now you have capital gain you can use as a deposit to buy a replacement property.The only Shared Equity loan currently available in Australia is funded through Adelaide Bank and their range of mortgage managers.
They are available for both first, second purchases as well as refinancing although are only available on full doc loans.
Loans are limited to a max of 95% LVR with upto 20% being provided on a nil interest rate by Rismark.
Adelaide Bank charge their standard variable rate on the 75% loan amount.There are both post code and monetary $$$ restrictions.
Richard Taylor | Australia's leading private lender
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